Case Brief: Wanaka Stakeholders Group v Queenstown Lakes District Council

May 27, 2021

Summary
The Wanaka Shareholders Group (WSG) applied for judicial review of the Queenstown Lakes District Council (QLDC)’s decision to lease the Wanaka Airport land and infrastructure to Queenstown Airport Corporation Ltd (QAC).

Background
QAC, a council-controlled organization, owns Queenstown Airport.  In April 2018 QAC took over the Wanaka Airport lease. WSG represents approximately 3,500 residents of Wanaka and the Upper Clutha Valley. Membership grew in response to concerns about possible intrusive development of Wanaka Airport, including the implementation of jet services. WSG also had concerns that the lease duration to QAC was 100 years and was perpetually renewable.

The Case
Under s 97(1)(b) of the Local Government Act, decisions to transfer ownership or control of a strategic asset must be provided for in a local authority’s long-term plan. WSG argued that the terms of the lease amounted to a transfer of ownership or control of the airport. Because of this, QLDC should have provided for the decision in its long-term plan and its failure to do so was in breach of the Act.

Was there a transfer of ownership?

The Court interpreted ‘ownership’ under s 97 to require transfer of freehold title. The Court acknowledged that the lease transferred legal ownership of all relevant buildings and assets that made the airport. However, while the buildings and assets may constitute the airport, freehold title to the land itself had not transferred to QAC and so it did not meet the definition of ‘ownership’ under the Act.

Was there a transfer of control?

The Local Government Act does not define ‘control’ and no previous decisions had established what constitutes a transfer of control for the purposes of s 97. The Court determined Parliament must have intended s 97 to apply where the authority transfers substantial and effective control over the asset, irrespective of whether freehold title is retained. The terms of the lease gave QAC economic and legal control over the airport with effectively the same rights as they would have if they owned title. For these reasons, the Court held the lease gave QAC ‘control’ over Wanaka Airport.

The transfer of control meant the decision should have been made in the context of the long-term plan. By failing to do so, QLDC acted unlawfully.

Had QLDC taken a decision to alter significantly the level of service provision at Wanaka?

WSG also argued that the intention to provide jet services was a significant alteration to the airport’s service provision, which should have been provided for in the long-term plan as well. However, the Court found that while QAC and QLDC had high level discussions about the possibility of expanding services, no fixed plans had been made that could amount to an agreement that ought to have been included in the long term plan.

Did the consultation carried out by QLDC comply with the Local Government Act?

WSG’s final claim was that QLDC had breached consultation requirements under the LGA. QAC undertook consultation in August setting out options for development of Queenstown Airport which included discussion about the use of Wanaka Airport. WSG claimed QLDC did not adequately explain its plans for expansion in their Statement of Proposal for development of Wanaka Airport. The proposal stated that Wanaka Airport’s role “over the next decade or longer” was to accommodate spillover from Queenstown Airport. There was no indication that QLDC contemplated a lease of 100 years or more, nor that this decision to grant a lease would include development for scheduled jet services.

The Court agreed and found that the Statement of Proposal did not fairly reflect QLDC’s plans for the airport lease.

Result
The High Court issued a declaration that QLDC’s decision to grant the lease was unlawful, meaning that it and any arrangements associated with it had no legal effect.

If you would like to understand more about this case, or similar issues, please contact Senior Consultant Brigitte Morten

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